The crisis of Brazilian capitalism and the first 100 days of the Bolsonaro administration: in what measure can Paulo Guedes’s politics solve the problems of the working class?

Written by João Ricardo Soares. PSTU-Brazil.

The minister of Finances of one of most industrialized countries in the world and one of the world powers, France, gave a rather unusual statement. Bruno Le Maire said “it is necessary to rethink capitalism”. He says that, in the current framework, the system “stimulates [social] inequality; destroys the planet and is incapable of accomplishing public interest goals”.[1]

The minister of president Macron, elected through a right-wing party and cornered by an immense mass movement led by the “yellow jackets”, goes further and states that “if we do not invent a new capitalism, absurd economic solutions will become stronger and lead us to recession”. However, what is more likely is that the world economy drops into recession before Le Maire can invent his “new capitalism”.

But what would be this “new capitalism”? The same Le Maire ran for his party’s primaries two years ago, intending to be the presidential candidate and proposing the creation of “mini jobs”, which would pay less than the minimum wage, as a path to creation jobs… and now he defends the need of “valuing work”.

In the “new capitalism” would be included the participation of workers in the profits of companies and a deal for there to be worldwide common taxation for big companies. But the conclusion is pathetic: “we lack money for this new capitalist model, it’s that simple”, affirms the minister.

What is curious in all that is the fact that the same French government, which proposes the creation of enormous conglomerates of “European” companies that are capable of competing with the US monopolies, says anything about “valuing work”. In the moment in which Trump and the EU exert pressure over China demanding it removes its companies from the field of high-tech equipment (like Huawei), and pressures the European governments to boycott the purchase of equipments of this company, France proposes, once again, the union of all European imperialisms to play the same high-stake game of the competition.

In the end, this is about how French companies build their own path on the exploitation of Asian workers and occupy a place in this market, whose work is undervalued.

Cornered between the USA and Asia, the two most dynamic poles of world capitalist economy, Europe tries to seek conditions for a more equal competition among the capitalist monopolies. But while Trump cuts the taxes of US multinationals, France is involved in a huge movement led by the “yellow jackets”, which have already had 10 killed by Macron’s repression, as well as an important public services’ strike which fights to “value work”, while Le Marie and Macron plan on closing down more than 100.000 jobs.

The call for the continuation of the movement has a program which demands all that Macron’s “new capitalism” denies to French workers: increases in wages and pensions; the lifting of the tax over pensions and staple products. An end to the subsides to large companies and the re-establishment of the wealth tax – which Macron extinguished.

That is, it is not that there is a lack of money in Macron’s “new capitalism”, the problem is who owns the money!

The European “disunion”

The French ruling class – cornered by a huge mass movement, tries – in vain – to “regulate” the world competition of big companies, which become much more fierce with the opening of borders and what is conventionally called “globalization”. But we have the feeling that Trump will never accept any sort of “regulation” in competition, quite the opposite.

France seems to wave the flag of a pact between powers, while it attempts to build an inner “peace” by “waving” with something of the welfare state which reigned over Europe after World War II. However, since there is a “lack of money” for the “new capitalism”, it is nothing but a “waving”.

Trounced by the monopolies, which seek to equalize the production conditions among countries by reducing wages and social benefits to the lowest common denominator, the achievements of the European workers which are known as the “welfare state”, as well as the class struggle in France, are all part of the same social and political phenomenon.

The longing for the post-war “golden years”, in which French financial capital reorganizes by leaving the countries which freed themselves from the yoke of colonization and focusing its investments on the reconstruction of Europe, now does find the same living space as before, since it has been occupied by the engine of the German industry, the one which benefited the most from the free circulation of capital and goods in the European Union.

But, since the British are wistful of their old colonial empire and leave the EU, and the Italians return to the “Silk Road”, now through the hands of the Chinese and for the price of a few billions of Euros, tearing themselves from pressure of Trump and the EU and their offensive against Chine, all of this indicates only that the propaganda of the “new capitalism” is just this: propaganda of a “humane capitalism”. Something like an “ointment” for the wounds, after Macron’s riot police shows that rules of the “new” and the “old” capitalism are no different.

One the eve of a possible world recession, the every man for himself has already been adopted by Trump, and the Italian and British bourgeoisie look for their own paths, which indicates the opposite of the construction of “European” companies, that is, the unity among the European imperialisms to face the global competition between the monopolies. It has been some years since the maxim of “he who has no competence does not establish himself” is the rule, and by “competence” they mean financial power.

The “ex-emerging” Brazil does not escape this conclusion. After being humiliated in the USA, Bolsonaro and Guedes, who wanted to sell meat and sugar and sold nothing yet bought wheat, the time-line of the regression of the submissive Brazilian capitalism goes straight to the 19th century, and, why not, to before the independence.

The “old capitalism” across the Atlantic…

Having apparently no connection with the facts of France, some news in thee Brazilian press bring us to the “new-old” capitalism of Guedes-Bolsonaro. In a recent study, the Getúlio Vargas Foundation (FGV) says that between 2011-2020 we will have lived another “lost decade”, a term for the Brazilian 80s, in which the country’s growth was insignificant.

But if what is bad can always get worse, the study says that this decade will have the worst growth in 120 years, even worse than that of the “lost decade”.

In the 80s, according the FGV’s study, the average annual growth of the GDP was 1,6% per year. But the period which is ending (2011-2020) will flaunt an average growth of 0,9%! The name to christen such a long period of stagnation, even worse than the “lost decade”, will defy the creativity of our economists.[2]

Meanwhile, the press celebrates the soy exports: “we” have sold 82 million metric tons to the Chinese, 21% more than on 2017. But it is exactly the Chinese, to whom our astrologer Foreign Relations minister does not want to sell our soul [3] – not that anyone would be interested in buying it – those that purchase no less than 82% of the soy produced in the country.

But an important detail is missing: the US Department of Agriculture (USDA) says the US soy-bean inventories in March 1st were over 1 million tons above what was predicted for the time, around 29% above that registered in the same day last year.[4]

The increased sales of Brazilian soy are the result of Chinese retaliations against the tax hike imposed by Trump on Chinese companies that export to the US. This has resulted in the increase in the US stock, however, the “deal” which is being “negotiated” by Trump requires the Chinese to buy US$200 billion from the Yankee soy producers in the next months. Which would affect the exports of Brazilian companies.

Another matter which has not won the same spotlight in the press completes the painting of the “old capitalism”: not only have we been in the recession for too long, the news is that the industrial GDP of the seven cities which compose the Brazilian ABC fell from R$ 28,9 billion to R$ 24,3 billion. A drop of 16%, but actually, once the inflation is not counted, the retraction is close to 39% [5].

This process of free fall of the industrial production may indicate not only the result of a conjunctural phenomenon of the long recession. We must also consider that it is possible that this not just a “relative de-industrialization”, that is, a growth of manufacturing industry which is smaller than agriculture and extraction industry. This drop in the absolute value of the industrial GDP of the second biggest industrialized region in the country may mean not only that companies are being transferred to other regions, but that they are simply being destroyed.

There goes Brazil down the hill, balancing on a can, it is no small deal…” (Moraes Moreira)

The teamsters who voted for Bolsonaro expected the “law” to be followed at least. They hoped the captain would the respect the minimum freight price, which was voted and sanctioned by Congress but is not being followed. To make matters worse, the price increase of diesel marches on and on… after all, the Wall Street stock owners who own Petrobras’ shares want profits, and Petrobras closes 2018 with a profit of U$ 25,8 billion for the hike of 31% in the price of fuel. But the soy farmers cannot pay more for the freight, or their profits will fall.

And so, the captain which said we would “bring order” and “abide by the laws” seems to choose the laws that must be obeyed, particularly when it concerns guaranteeing the profits of the US investment funds and the soy farmers.

And the small owners of the trucks find out too late that they have been used as pawns for the Wall Street shareholders to fatten their purses. But while the international investment funds and the Brazilian banks are happy with the profits of Petrobras, a bridge which links the Belém metropolitan region to the interior of the state of Pará falls down, following the viaducts in São Paulo; and as an “award” for the mass murder in Brumadinho, the profits of Vale increase by 45% (2018); and if that was not enough, the rock salt mining exploited by Braskem in the state of Alagoas is sinking some neighbourhoods in the capital city of Maceió, bringing with them the houses of the inhabitants.

The neighbourhoods of Maceió sinking with their houses are the mirror which reflects a country which sinks to ensure billionaire profits for a handful of parasites.

We have reached a stage on the crisis of Brazilian capitalism in which profit equals destruction. The rupture of dams, the fall of bridges and viaducts, is merely the superficial expression of a capitalism in crisis, appearing spectacularly in the press as “accidents”. Just like urban violence, it hides the unemployment and desperation of families, concealing what matters the most: the slaying of thousands of people by a system which not only does not guarantee education, health or a job for most of the population, but now also wants to steal the miserable pensions from those who can even get them, so that investment funds speculate on the financial market.

When businessmen and bankers do not increase their profits through the expansion of the system, with more investment to exploit more workers, they will seek it through plain robbery. The labour reform which enormously increases the exploitation of workers without capital having to invest a single dime; the tax reform – which hits with taxes those who are below and exempts even more those who are above from them – the Pension reform, where banks and investment funds would have access to billions of dollars without even ensuring that in the future they will have to pay pensions to workers. All of this is a transfer of wealth in the form of robbery, or the expropriation of millions of workers.

Capitalism as a global system of exploitation has built a hierarchy between dominant and dominated countries. In the map of dominated countries, Brazil had an intermediate place due to the weight of its industry, superior among the dominated, yet fragile among the dominant. By transforming into an exporter of agricultural products and ore, it falls a degree from the position it had.

And to keep their profits, the cowardly ruling class of this country dedicates itself to robbery, to expropriate the poor and to destruction, while making the country ever more submissive – the visit of Bolsonaro/Guedes to the USA is the grotesque expression of this reality.

In France, the yellow jackets fight against the offensive of French financial capital to ensure the conditions of existence of the exploited majority, that is, the living standards achieved after more than a century of struggles against capital. In Brazil, it is the conditions of subsistence of the majority of the population which will be in check.

Ultimately, the essence of the problem is called capitalism.

Translated by Miki Sayoko

[1]Valor, 16/03/2019.

[2]O Globo, 25/03/2019.

[3]The minister declared that Brazil could still trade with China, but would not sell its soul to that country.

[4]Valor, 30/03/2019.